BELFAST HEALTH AND SOCIAL CARE TRUST ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2011

Transcription

1 BELFAST HEALTH AND SOCIAL CARE TRUST ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2011

2 Belfast Health & Social Care Trust Annual Accounts For the year ended 31 March 2011 Laid before the Northern Ireland Assembly under Article 90 (5) of the Health and Personal Social Services (NI) Order 1972 (as amended by the Audit and Accountability Order 2003) by the Department of Health, Social Services and Public Safety. on 28 th June 2011

3 ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2011 CONTENTS Foreword 1 Page Statement of Belfast Health & Social Care Trust s Responsibilities and Chief Executive s Responsibilities 2 Certificates of Director of Finance, Chairman and Chief Executive 3 Statement on Internal Control 4-14 The Certificate of the Comptroller and Auditor General to the Northern Ireland Assembly Statement of Comprehensive Net Expenditure 17 Statement of Financial Position 18 Statement of Changes in Taxpayers' Equity 19 Statement of Cashflows 20 Notes to the Accounts The Report of the Comptroller and Auditor General to the Northern Ireland Assembly Account of Monies Held on Behalf of Patients & Residents The Certificate of the Comptroller and Auditor General to the Northern Ireland Assembly 73-74

4 ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2011 FOREWORD These accounts for the year ended 31 March 2011 have been prepared in accordance with Article 90(2)(a) of the Health and Personal Social Services (Northern Ireland) Order 1972, as amended by Article 6 of the Audit and Accountability (Northern Ireland) Order 2003, in a form directed by the Department of Health, Social Services and Public Safety. 1

5 ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2011 STATEMENT OF BELFAST HEALTH & SOCIAL CARE TRUST S RESPONSIBILITIES AND CHIEF EXECUTIVE S RESPONSIBILITIES Under the Health and Personal Social Services (Northern Ireland) Order 1972 (as amended by Article 6 of the Audit and Accountability (Northern Ireland) Order 2003), the Department of Health, Social Services and Public Safety has directed the Belfast Health and Social Care Trust to prepare for each financial year a statement of accounts in the form and on the basis set out in the Accounts Direction. The financial statements are prepared on an accruals basis and must provide a true and fair view of the state of affairs of the Belfast Health and Social Care Trust, of its income and expenditure, changes in taxpayers equity and cash flows for the financial year. In preparing the financial statements the Accounting Officer is required to comply with the requirements of Government Financial Reporting Manual (FREM) and in particular to : - observe the accounts direction issued by the Department of Health, Social Services and Public Safety including relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis; - make judgements and estimates on a reasonable basis; - state whether applicable accounting standards as set out in FREM have been followed, and disclose and explain any material departures in the financial statements; - prepare the financial statements on the going concern basis, unless it is inappropriate to presume that the Belfast Health and Social Care Trust will continue in operation; - keep proper accounting records which disclose with reasonable accuracy at any time the financial position of the Belfast Health and Social Care Trust; - pursue and demonstrate value for money in the services the Belfast Care and Social Care Trust provides and in its use of public assets and the resources it controls. The Permanent Secretary of the Department of Health, Social Services and Public Safety as Accounting Officer for health and personal social services resources in Northern Ireland has designated Mr Colm Donaghy of the Belfast Health & Social Care Trust as the Accounting Officer for the Belfast Health and Social Care Trust. The responsibilities of an Accounting Officer, including responsibility for the propriety and regularity of the public finances for which the Accounting Officer is answerable, for keeping proper records and for safeguarding the Belfast Health and Social Care Trust assets as set out in the Accounting Officer Memorandum, issued by the Department of Health, Social Services and Public Safety. 2

6 ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2011 CERTIFICATES OF DIRECTOR OF FINANCE, CHAIRMAN AND CHIEF EXECUTIVE I certify that the annual accounts set out in the financial statements and notes to the accounts (pages 17 to 66) which I am required to prepare on behalf of the Belfast Health & Social Care Trust have been compiled from and are in accordance with the accounts and financial records maintained by the Trust and with the accounting standards and policies for HSC bodies approved by the DHSSPS. I certify that the annual accounts set out in the financial statements and notes to the accounts (pages 17 to 66) as prepared in accordance with the above requirements have been submitted to and duly approved by the Trust Board. 3

7 ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2011 STATEMENT ON INTERNAL CONTROL Scope of Responsibility The Board of the Belfast Health and Social Care Trust is accountable for internal control. As Accounting Officer and Chief Executive of the Trust, I have responsibility for maintaining a sound system of internal control that supports the achievement of the organisation's policies, aims and objectives whilst safeguarding the public funds and assets for which I am responsible in accordance with the responsibilities assigned to me by the Department of Health, Social Services and Public Safety (DHSSPS). Specifically, the Trust has the following key relationships through which it must demonstrate a required level of accountability:- with HSC Board commissioners, through service level agreements, to deliver health and social services to agreed specifications; with colleague agencies in the HSC, through close and positive working arrangements; with local communities, through holding public board meetings, and publishing an annual report and accounts; with patients, through the management of standards of patient care; and with the DHSSPS, through the performance of functions and meeting statutory financial duties. The purpose of the system of internal control The system of internal control is designed to manage risk to a reasonable level rather than to eliminate all risk of failure to achieve policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an ongoing process designed to:- identify and prioritise the risks to the achievement of organisational policies, aims and objectives; evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically. The system of internal control has been in place in the Trust for the year ended 31 March 2011, and up to the date of approval of the annual report and accounts, and accords with DHSSPS guidance. The Board of the Trust exercises strategic control over the operation of the organisation through a system of corporate governance which includes:- a schedule of matters reserved for Board decisions; a scheme of delegation, which delegates decision making authority within set parameters to the Chief Executive and other officers; Standing Orders and Standing Financial Instructions; an Audit Committee; an Assurance Committee; a Remuneration Committee; a Complaints Review Committee; a Charitable Trust Fund Advisory Committee. 4

8 The system of internal financial control is based on a framework of regular financial information, administrative procedures including the segregation of duties and a system of delegation and accountability. In particular it includes:- comprehensive budgeting systems with an annual budget which is reviewed and agreed by the Board; regular reviews by the Board of periodic financial reports which indicate financial performance against the forecast; setting targets to measure financial, clinical and other performance; clearly defined capital investment control guidelines; as appropriate, formal budget management disciplines; a requisition and approval system for procuring goods and services; a system of detailed recording and notification to protect the Trust s assets. The Trust has an internal audit function which operates to defined standards and whose work was informed by an analysis of risk to which the body was exposed and annual audit plans were based on this analysis. In 2010/11 Internal Audit reviewed the following systems:- Acute Services Financial Controls (Satisfactory Assurance) Acute Services Risk Based (Satisfactory Assurance) Social & Primary Care Services Financial Controls (Satisfactory Assurance) Social & Primary Care Services Risk Based (Satisfactory Assurance) Payroll & Review of Payroll Procedures Non Pay Expenditure (Satisfactory Assurance) Bank and Cash (Satisfactory Assurance) Budgetary Control (Substantial Assurance) General Ledger (Satisfactory Assurance) Contracts with Voluntary Sector (Satisfactory Assurance) Private Patient Income (Satisfactory Assurance) Agency & Locum (Limited Assurance) Management of Maintenance Contracts (Limited Assurance) Cash Management in Social Services Facilities (Satisfactory Assurance) Client Monies & Cash & Valuables Handling in Independent Sector (Satisfactory Assurance) Stocktaking (Satisfactory Assurance) Contracts with Independent Sector (Satisfactory Assurance) E-mileage Staff Care (Limited Assurance) Performance Management (Satisfactory Assurance) Absence Management (Limited Assurance) WHO Surgical Checklist (Limited Assurance) Medicines Management (Satisfactory Assurance) Infection Control (Satisfactory Assurance) Risk Management (Satisfactory Assurance) Information Governance (Limited Assurance) Controls Assurance Standard Verification The Head of Internal Audit reported that there is a satisfactory system of internal control designed to meet the Trust's objectives for the year ended 31 March However, limited assurance has been provided in respect of six audits: Agency & Locum: in respect of utilising non-contracted agencies and checking processes are not consistently robust. Trust staff have been reminded of the need to retain evidence that contracted agencies have been contacted prior to the engagement of non-contracted agencies and of their responsibilities for checking contracted rates. 5

9 Management of Maintenance Contracts: with regard to insufficient monitoring to ensure contracted equipment service and maintenance visits are occurring and issues surrounding the award of contracts to suppliers without the use of competitive sourcing. The Trust has now carried out a full investigation into the findings reported by Internal Audit and can confirm that although a number of Single Tender actions were identified all of these where wholly appropriate. The Trust acknowledge that the required procedures were not followed to authorise these single tender actions. Staff have been briefed and are now complying with the procedures. Monitoring arrangements will be reviewed and the Estates Department will arrange review meetings with providers. Only invoices that are supported with a signed service report are approved for payment. A number of exceptions were noted where invoices could not be agreed to contract prices. This was primarily due to contract information not being held on file and the majority have now been agreed to schedule of rates held electronically. Procurement processes have been updated to take account of audit findings and revised procedures are being finalised for review by Health Estates Investment Group. The matters raised in the Internal Audit Report are subject to a Public Interest Report being issued by the NIAO. Staff Care: with regard to a lack of formal processes and an over reliance on one member of staff in relation to the charging of client organisation for the provision of the Care Line and Referrals service and the rates paid to Republic of Ireland counsellors. The Trust is reviewing the policies and procedures in place, along with contracts and prices, in line with Internal Audit recommendations. Absence Management: due to inconsistent formalised processes for recording and reporting sick leave by medical departments. The Trusts Absence Protocol has been launched and the importance of recording medical staff sickness absence has been reasserted through Co-Director Business partnering. WHO Surgical Checklist: with regard to controls surrounding the introduction of the WHO Surgical Checklist. A standard surgical checklist will be introduced to all Trust sites. Information Governance: in relation to evidence of non adherence and knowledge of Trust Information Governance policies and procedures. The Trust Data Protection Manager and Health & Social Care Records Manager will liaise with respective Governance Leads to ensure all staff are aware that up to date policies, training and promotion of Information Governance guidance is available via Trust Intranet. Information Asset Owners have been identified and they will receive training in May The following reports received overall satisfactory level of assurance, however limited assurance was provided in specific areas as follows; Acute Service Finance: specific limited assurance with regard to taxi expenditure as some charges could not be agreed to contractual rates. The Trust guidance on taxis was reissued to all authorised officers on 28 February Social & Primary Care Financial Controls: specific limited assurance with regard to the verification process for domiciliary expenditure. The Trust will review the system of invoice authorisation and verification and ensure that all details are verified to source systems. Payroll: specific limited assurance in relation to overpayments to leavers and maternity pay calculations. A Line Manager s Checklist has been issued to emphasise the importance of timely notifications to Payroll. Staff training has been provided to address any inconsistencies in calculation of maternity pay. Private Patient Income: specific limited assurance in regard to identification of fee paying services work. A standardised approach to Category 2 work is being developed along with a revised procedure document. Medicines Management: specific limited assurance with regards to controlled drugs. Nursing, medical and pharmacy staff will be reminded that compliance with the controlled drug policy is mandatory and further training sessions will be made available. Infection Control: hand hygiene procedures are not being adequately and consistently performed across sites. The Trust accepts that compliance with hand hygiene can still be improved. Service Groups will be reminded of their responsibility for the implementation and review of hand hygiene audit results. Further support is provided through independent Infection Prevention Control Team audits. 6

10 Recommendations to address control weaknesses have been or are being implemented. Internal Audit conduct formal follow-up reviews in respect of the implementation of the priority one and two internal audit recommendations agreed in the Internal Audit reports. Internal Audit presented a full Report which showed that the majority of agreed actions have been fully or partially implemented. With regard to the wider control environment, the Trust had in place a range of organisational controls, commensurate with the assessment of risk, designed to ensure the efficient and effective discharge of its business in accordance with the law and Departmental direction. Every effort was made to ensure that the objectives of the Trust were pursued in accordance with the recognised and accepted standards of public administration. By way of example, the Trust had in place a range of human resource policies, procedures, protocols and practices governing activities across the various service groups including:- The application of an objective and systematic recruitment and selection process and compliance with a comprehensive range of safeguards under the Trust s Safer Recruitment and Employment Framework: encompassing all the pre-employment checks such as qualification/registration checks, references, health checks, and appropriate vetting; plus post-registration Alert Notice and Safeguarding Vulnerable Groups Vetting and Barring Scheme requirements. Further work to ensure compliance with employment checks regarding agency usage has been instigated with Service Groups. a learning and development strategy to develop and train all staff to ensure they are competent to undertake their roles and achieve maximum individual and organisational potential. effective workforce controls to ensure adherence to strict processes which include controls over the creation of all new posts, reprofiling of existing posts and replacement of vacant posts. Mandatory Equality and Diversity training is provided for all staff with specific training for those with managerial responsibilities. Promotion and adherence to Trust Policies including the Equal Opportunities Policy, Harmonious Working Environment/Joint Declaration of Protection and the Trust s Employment Equality and Diversity Plan ensure compliance with statutory requirements. Robust arrangements for conducting good employee relations in line with Statutory Procedures and Good Practice as set out in the Grievance, Disciplinary and Capability Procedures and the Trust s Joint Negotiating Forum arrangements. A framework for best practice in business improvement through people Investors in People (IiP). The Trust was assessed in the prior year against 10 core standards and met all 39 evidence requirements to achieve formal accreditation as an IiP organisation. These are regularly reviewed and updated to ensure that they continue to reflect best practice and the principle of equality of opportunity, were in line with the Trust s aims and values, complied with legal and statutory requirements and provided effective control mechanisms. Our approach to fraud The Trust continues to participate in the National Fraud Initiative which is overseen by a Project Board including Director of Finance, Director of Human Resources and the Trust s Data Protection Manager. The Audit Committee is regularly updated with progress and to date no fraudulent activity has been identified. The Trust had a Fraud Policy and Fraud Response Plan in place during 2010/11. In addition, fraud awareness training has been offered and provided to managerial staff and to all new starts via the Corporate Induction Programme. During 2010/11 the Trust dealt with 12 incidents of fraud with a total value of 15, All cases have been thoroughly investigated with the assistance of PSNI and Internal Audit, where appropriate. The results of investigations have led to improved and/or new controls and disciplinary action. 7

11 Capacity to handle risk The Trust is committed to providing high quality patient and client services in an environment that is both safe and secure. The Trust Board has approved an Assurance Framework and a Risk Management Strategy and has established an Assurance Committee whose membership includes all Non Executive Directors. This Committee reports directly to the Trust Board. The Assurance Framework outlines the Chief Executive's overall responsibility and accountability for risk management. The Framework also sets out a system of delegation of responsibility at Trust Board, Executive Team and Service Group levels. While ensuring local ownership in managing and controlling all elements of risk to which the Trust may have been exposed, there is a clear line of accountability through to Trust Board. Risk management is at the core of the Trust s performance and assurance arrangements and the Assurance Committee, chaired by the Trust s Chairman, provides Board level oversight in this key area. This Committee, along with the Audit Committee, has scrutinised the effectiveness of the Risk Management Strategy. The Trust acknowledges that it is impossible to eliminate all risks and that systems of control should not be so rigid that they stifle innovation and imaginative use of limited resources. Inevitably the Trust may have to set priorities for the management of risk. There is a need to balance potentially high financial costs of risk elimination against the severity and likelihood of potential harm. The Trust will balance the acceptability of any risk against the potential advantages of new and innovative methods of service. The Trust recognises that risks to its objectives may be shared with or principally owned by other individuals or organisations. The Trust involves its service users, public representatives, contractors and other external stakeholders in the implementation of the Risk Management Strategy. Risk management is integral to the training for all staff as relevant to their grade and situation, both at induction and in service. To support staff through the risk management process, expert guidance and facilitation has been available along with access to policies and procedures, outlining responsibilities and the means by which risks are identified and controlled. Actions taken to reduce risk have been regularly monitored and reported with trends being analysed at Service Group, Corporate and Board levels. Dissemination of good practice has been facilitated by a range of mechanisms including systems for the implementation and monitoring of authorative guidance, clinical supervision and reflective practice, performance management, continuing professional development, management of adverse events and complaints, multiprofessional audit and the application of evidence based practice. The Trust seeks to ensure that its medical workforce is equipped to provide the best health care that can be achieved through investment in education, appraisal, appropriate job planning and where issues arise that are appropriate to maintaining high professional standards these are dealt with using the appropriate procedures, involvement of National Clinical Assessment Service where necessary and regulatory bodies such as the General Medical Council and General Dental Council. 8

12 The risk and control framework The Assurance Framework describes the relationship between organisational objectives, identified potential risks to their achievement and the key controls through which these risks will be managed, as well as the sources of assurance surrounding the effectiveness of these controls. The Assurance Framework incorporates the Risk Management Policy and establishes the context in which the Trust Management Plan was developed, as well as determining the mechanism through which assurances were provided to the Trust Board. The Assurance Framework was revised in 2010/11 to take account of organisational restructuring and a change in roles and responsibilities of executive and non executive directors. The Assurance Committee Sub Committee structure was also revised and new Terms of Reference were developed for the Assurance Committee and Sub Committees. The revised Assurance Framework and Terms of Reference were approved by the Assurance Committee of the Trust Board on the 2nd June The Assurance Framework allows an integrated approach to performance, targets and standards which include controls assurance standards and quality standards for health and social care. The Assurance Committee established a revised agenda and schedule of annual reports during 2010/11 to take account of the development of the new Sub Committees structure. These committees report through the Assurance Group to Executive Team. They are generally expert groups that are responsible for developing assurance arrangements within specific areas of Trust activity and provide the necessary scrutiny of practice. The Assurance Group reviewed its membership and terms of reference and is now chaired by the Chief Executive. The Risk Register Review Group continues to meet on a quarterly basis, to scrutinise the evaluation of all significant risks arising from Service Group and Controls Assurance Risk Registers. Each Service Group has maintained and further developed systems to identify risk, assess impact and likelihood of harm occurring, and to maintain control in line with the Assurance Framework and the Risk Management Strategy. These risks are used to populate Service Group risk registers, which are updated on an ongoing basis and which feed into the Belfast Trust s Assurance Framework Principal Risks and Controls document. The Trust is also informed by the reports and inspections carried out by a range of independent bodies, including RQIA and Social Services Inspectorate. Clinical Pathology Accreditation (CPA) is part of the routine cycle of external quality assurance for Clinical Pathology Laboratories across the UK the status of conditional is awarded until all remedial actions are put in place. BHSCT laboratories have a Quality Operational Group who co-ordinate the implementation of the remedial actions to gain full accreditation once the evidence of compliance with the standards is submitted to the CPA Specialist Advisory Group. A comprehensive remediation action plan was put in place following the outcome of the Medicines and Healthcare products Regulatory Agency (MHRA) inspection on the Mater site in December The plan was developed to address the critical non conformances across the Trust and the subsequent actions taken in a number of areas provided sufficient evidence to the MHRA Inspectors on 6 April 2011 that the status of critical was changed to that of major. The Trust engages proactively with all such reviews and the Board is assured that appropriate actions are taken, by the Assurance Committee. The Trust uses the Directorate of Legal Services in the Business Services Organisation as its main legal provider. As regards to compliance with Departmental guidance in respect of payment for legal and litigation services, Internal Audit reviewed the Trust s compliance with the Departmental guidance contained in HSS(F) 67/2006 Payments in respect of Litigation and Legal Services, as part of the Non Pay Expenditure 2009/10 Audit. The Trust received satisfactory level of assurance in respect of litigation payments. The Trust is committed to ensuring that Personal and Public Involvement (PPI) is embedded into all aspects of its business. The Trust s approach to user involvement is detailed in Involving You, the Trust framework for community development and user engagement. There is a PPI steering group which meets regularly to guide and challenge the Trust in relation to this work. There are a wide range of user engagement opportunities throughout the Trust, both corporately and within clinical service groups, which allow people to become involved in the development, improvement and evaluation of Trust services. 9

13 Information Governance Arrangements The management of information within the Trust remains a high priority. The agenda is managed by the Information Governance Board (IGB) which is chaired by the Director of Performance and Service Delivery and is attended by the Medical Director (Trust s Data Guardian), Director of Social and Primary Care Services (Deputy Data Guardian) and a range of senior staff from other service groups. Beneath this the Operational Working Group (OWG) has wide representation from service groups, risk and governance, Corporate Records, data quality, data protection, ICT security, Information, Human Resources and Corporate Communication. This group is responsible for working through the agreed governance action plan and reporting back to the IGB. Work from the IT technical security group and the health and social care corporate records group is also incorporated into the OWG. In addition to these Groups it is now been agreed to greatly expand the information governance community within the Trust. Forty Information Asset Owners have been identified mainly at Co-Director level and these staff will have a key responsibility for ensuring the governance of information assets within their area of responsibility. The Trust has policies to cover Data Protection, ICT Security, storage, retention and management of records, access to data from external organisations and access to records. A number of other policies are currently being drafted to ensure that all areas of data processing are adequately covered. There are a number of projects ongoing to review and improve the technical security of data, ensure data is accurate and up to date and increase staff awareness to information governance issues. The monitoring of information related adverse incidents by the IGB is now well established. In each case remedial action is prescribed and learning is communicated throughout the Trust. During the year the IGB considered thirty one incidents of which six resulted in data being lost. A number of these incidents were referred to the Information Commissioner s Office and advice sought on the effectiveness of our response and risk mitigation plans. The Trust continues to promote awareness of information governance issues though induction training for new staff, My Data Your Business training sessions for other staff and via leaflets, articles and intranet information. The civil service audit tool originally developed as part of a self assessment data protection review has resulted in the formation of an action plan which addresses a number of information governance issues. This is kept under review and also informs the Corporate Risk Register. Compliance with Controls Assurance Standards The Trust assessed its compliance with the 22 Controls Assurance Standards which were defined by the Department and against which a degree of progress is expected in 2010/11. 10

14 The Trust achieved the following levels of compliance for 2010/11. Standard Building, Land, Plant and Non-Medical Equipment Decontamination of Medical Devices Emergency Planning Environmental Cleanliness Environmental Management Financial Management (core standard) Fire Safety Fleet and Transport Management Food Hygiene Governance (core standard) Health & Safety Human Resources Infection Control Information Communication Technology Management of Purchasing and Supply Medical Devices and Equipment Management Medicines Management Records Management Research Governance Risk Management (core standard) Security Management Waste Management DHSSPS Expected Level of Compliance 70% - 99% (Substantive) 70% - 99% (Substantive) 70% - 99% (Substantive) 70% - 99% (Substantive) 70% - 99% (Substantive) 70% - 99% (Substantive) 70% - 99% (Substantive) 70% - 99% (Substantive) 70% - 99% (Substantive) 70% - 99% (Substantive) 70% - 99% (Substantive) 70% - 99% (Substantive) 70% - 99% (Substantive) 70% - 99% (Substantive) 70% - 99% (Substantive) 70% - 99% (Substantive) 70% - 99% (Substantive) 70% - 99% (Substantive) 70% - 99% (Substantive) 70% - 99% (Substantive) 70% - 99% (Substantive) 70% - 99% (Substantive) Trust Level of Compliance 74% Substantive 72% Substantive 81% Substantive 85% Substantive 79% Substantive 93% Substantive 77% Substantive 79% Substantive 90% Substantive 94% Substantive 81% Substantive 98% Substantive 88% Substantive 81% Substantive 83% Substantive 80% Substantive 70% Substantive 94% Substantive 80% Substantive 85% Substantive 76% Substantive 82% Substantive Reviewed by Self Assessment Self Assessment Internal Audit Self Assessment Self Assessment Internal Audit Self Assessment Internal Audit Self Assessment Internal Audit Self Assessment Self Assessment Self Assessment Self Assessment Self Assessment Self Assessment Internal Audit Self Assessment Self Assessment Internal Audit Self Assessment Self Assessment Extensive work has been carried out by Controls Assurance leads to maintain these results. The Trust recognise the limited assurance Internal Audit report on Information Governance and the specific limited assurance on Medicines Management in respect of controlled drugs and Infection Control in respect of hand hygiene and have reflected these issues in the self-assessment scores for the individual criteria affected. However overall the Trust has achieved substantive compliance for these standards. The Trust has worked closely with Internal Audit on this process, completing baseline assessments and producing action plans to address areas of weakness. 11

15 Capital Project Approval In last year s Statement on Internal Control we reported a revised business case was required for a major capital project at the Royal Hospital. The Trust has now received approval for the full amount required to complete this project. Significant Internal Control Issues Overpayment of Salary The Trust previously reported in 2009/10 an overpayment of salary of 83,593 over a period of 8 years to an individual who had left the Trust s employment. The error was identified in November 2009 and payments ceased immediately. As a result of this overpayment a staff in post audit was carried out and 100% compliance was obtained in February These audits continue to be carried out on a quarterly basis to ensure adequate controls are in place to mitigate against such overpayments. The Trust requested Internal Audit to carry out a review of payroll procedures and the recommendations from this report are being fully implemented. The matter was referred to Directorate of Legal Services (DLS) in February 2010 and to the PSNI in March The Trust also reported the matter to DHSSPS, DFP and the Trust s Audit Committee. Trust Estate The risks presented by the Trust s estate are managed by a combination of processes including compliance with legislation and guidance, the physical condition of the buildings themselves, and also the strategic situation, which considers the potential impact for the estate arising from wider incidents. Many of these issues have been presented for capital investment funding under the heading of MES (maintaining existing services) and while progress has been made in some areas, the majority of the issues remain a challenge. The Trust Estate also faces a range of significant control challenges which require particular investment/development. There are ongoing challenges in the specific areas of fire and environmental improvements, asbestos management/removal, and also water hygiene which require considerable ongoing investment. The recent winter freezing temperatures and utility failures presented major challenges for the estate and identified several areas of weakness which require major capital investment. The Trust is involved with the regional review of these and other estates related resilience issues which will finalise the regional position for prioritisation of works which will be subject to available capital resources. Oral Medicine Review On 24 November 2009, the Trust Medical Director received a report of concerns regarding the care and treatment provided to five patients by the Oral Medicine Department of the School of Dentistry. The concerns related to delayed diagnosis of oral cancer and onward referral to the appropriate specialist. The Trust initiated a formal investigation into the practice of the Consultant under the DHSSPS circular Maintaining High Professional Standards. The Trust also established supervision arrangements, and initiated a review of all of the casenotes of those patients seen by the Consultant during the calendar year On 3 December 2009, the Trust made contact with the National Clinical Assessment Service (NCAS) to which service the Trust is required to relate in the event of concerns regarding poor clinical performance of doctors and dentists. The advice of NCAS has been sought throughout the period from On 4 December 2009, the Chief Dental Officer of the DHSSPS was advised of the issues and actions being taken. On 18 December 2009, and particularly given concerns regarding the Consultant s private practice, referrals were made to the General Medical Council and the General Dental Council. The Trust has continued to liaise with both regulatory bodies as they continue their investigations, and in relation to the supervision and then exclusion of the Consultant from clinical practice. On 23 February 2010, an Alert Letter was issued by the DHSSPS to Trust and HSCB Chief Executives, highlighting that there was an issue regarding the Consultant s practice. On 25 February 2010, the Trust s investigation report was provided to the Medical Director. The situation was reviewed and it was agreed that actions (additional to those already taken) should await the conclusion of the casenote review. On 22 November 2010, the Trust received a draft report on the casenote review and determined that a call-back of patients would be required. Preparations for this call-back were initiated in accordance with the DHSSPS guidance. Meetings were arranged with representatives from the HSCB and PHA in order to plan for the call-back. 12

16 On 4 February 2011, the Trust initiated the call-back, with a Serious Adverse Incident (SAI) Report raised on 7 February 2011 given that the Trust was satisfied that the extant criteria for SAI reporting had then been met. The Trust has recently completed a draft review of the casenote review and call-back exercises, while it expects the Independent Inquiry to report shortly. The Trust will participate in the DHSSPS led review of hospital dental services, and the QUB led review of the School of Dentistry. Information Governance In March 2010 the Trust became aware of a series of unlawful entries to the disused Belvoir Park Hospital site by so-called Urban Explorers. The Trust was very concerned to learn that photographs, taken during these unlawful entries and posted on a number of internet sites, included photographs of the covers of patient s records and other patient related material including X-ray images. The incident was immediately declared a Serious Adverse Incident and a detailed internal investigation was carried out. The Belvoir Park Hospital site comprises approximately 42 departments on a 25 acre site and was inherited by the Trust in 2007 from the former Belfast City Hospital Trust. At that time the Trust was not aware that records were being held there. Services on the site have been discontinuing and buildings closing over several decades with the last services, cancer, closing in Sensitive material has been found in a number of buildings including some which were closed and sealed in The investigation also uncovered several thousand records of infectious disease patients some of which dated back to the 1950s and several thousand X-ray images. If the Trust had known about the records these records would have been subject to our Retention and Disposal Schedule and in this respect controls failed. It was decided that all records should be moved to secure storage. That process is now nearing completion and the site should be clear of all patient related material by June There was 24/7 security presence on the Belvoir Park Hospital site when it was handed over to the Trust in April 2007 and that security has remained and been increased in recent months. The removal if all information material has been hampered by severe asbestos contamination which was first discovered during the initial investigation but which has been getting progressively worse over the past year. This has lead to large quantities of the records having to be destroyed by removal, using specialist contractors to a secure and licensed landfill. The Trust did not inform the Information Commissioners Office (ICO) of the incident at the time. The Trust now agrees with the benefit of hindsight that the ICO should have been notified. The Trust is now the subject of a full investigation by the ICO into this incident, senior officers from both organisations have met on two occasions and the Trust is determined to learn all possible lessons from this event. The Trust takes its responsibilities with regard to data protection very seriously and recognises the substantial public concern that arises in such incidents. The Trust has completed an inventory of all disused buildings within the Trust and commenced a systematic inspection of these to determine if any sensitive material has been left behind in any of these. The Trust has also finalised a policy on the decommissioning of buildings/departments which will be implemented without delay. Senior Executive Pay In 2009, the Trust used the opportunity provided by the departure of one Director and the early retirements of two other Directors to make changes to its Executive Team structures. The changes resulted in the overall number of Director posts reducing from twelve to ten and a band reduction of one post with annual net recurring savings expected to be in the order of 146,000. The duties and responsibilities carried out by the three former Directors were allocated following a review to some of the remaining Directors and one new Director was recruited at a lower level. The Trust notified the Department, in advance in July 2009, of its intention to award those Directors taking on significant additional duties and responsibilities, additional responsibility allowances pending the outcome of a Regional Review of Senior Salaries by the Senior Salaries Review Board (SSRB), after which time the posts could be submitted to the Department for re-evaluation. 13

17 In September 2009, the Department notified the Trust that there was no scope within the Senior Executive pay scheme to make such allowances (a failing of the current scheme which is acknowledged by the Department). However, by that time the Trust had already implemented the changes and awarded the additional responsibility allowances. An internal audit review commissioned by the Department in October 2010, concluded that the Trust had acted outside its authority in that it had not received formal approval from the Department for the payment of these allowances. The Department has approved these payments with effect from 1 March 2011 pending a re-evaluation of the posts. The value of these additional responsibility allowances paid in the period 1 April 2010 to 28 February 2011 was 25,946 and 28,813 in 2009/10. The NIAO have confirmed that they will issue a qualification to their regularity opinion in respect of these financial transactions. On the foot of an internal governance review in relation to this matter the Trust has now revised the Terms of Reference of its Remuneration Committee and is confident that it has in place arrangements to ensure that any external approvals necessary to remuneration changes are obtained. The NIAO have notified the Trust that they have issued a Public Interest Report in respect of Senior Executive Pay. The five HSC Trusts have been issued a Public Interest Report in respect of Maintenance Contracts. A copy of the report is attached to these accounts. Review of Effectiveness As Accounting Officer, I have responsibility for the review of effectiveness of the system of internal control within the Belfast HSC Trust. My review is informed by the work of the internal auditors and the executive managers within the Trust who have responsibility for the development and maintenance of the internal control framework and comments made by the external auditors in their management letter and other reports. Throughout the year the Trust Board has been briefed on control issues by the Chairs of the Audit Committee and Governance Committee. Within the context of the Audit Committee the work of the Internal Audit and External Audit functions was fundamental to providing assurance on the ongoing effectiveness of the system of internal financial control. In addition, the controls assurance standards and the annual self-assessment against the standards provided an important assurance to the Governance Committee. During the year there were six Internal Audit reports that received limited assurance. Also a number of reports received overall satisfactory assurance with limited assurance in specific areas. The Corporate Finance Group s Governance & Audit Team has embedded an audit process which ensures that all Corporate and Service Groups are aware of their responsibilities for effective internal controls. The Governance & Audit Team have been issuing Action Plans throughout 2010/11 and monitor the implementation of all audit recommendations, in line with the agreed timetable. Those areas that received limited assurance Internal Audit Reports in 2009/10 are closely monitored and regular progress reports are provided to the Audit Committee to demonstrate compliance with Action Plans. During the year the Board provided non-recurrent income to all Trusts to help address the financial gap. The Trust s share of the total allocation was 10.3 million. This funding along with additional savings and slippage against some schemes allowed the Trust to break-even in 2010/11. During the Christmas/New Year period the Trust came under severe pressure through a combination of the water crisis, severe weather and a seasonal upturn in emergency admissions which was compounded by H1N1 influenza. The Emergency Departments, Estates Department, Wards and Critical Care Unit came under particular pressure. Contingency arrangements were required in critical care and the Trusts Pandemic Flu Plan was activated. The Trust maintained services throughout this period with minimal disruption. This was a significant testament to the commitment of staff, the contingency arrangements in the Estates Department and the robustness of the Trusts Pandemic Flu Plan. I have been advised on the implications of the result of my review of the effectiveness of the system of internal control by the Trust Board, Audit Committee, Assurance Committee and sub committees. There is a process in place to instigate Action Plans, address weaknesses and ensure continuous improvement to the system of internal control. Follow up audits are carried out and the Trust will continue to implement the compliance regime during 2011/12. 14

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20 STATEMENT OF COMPREHENSIVE NET EXPENDITURE FOR THE YEAR ENDED 31 MARCH 2011 Expenditure 1.26 Restated NOTE 000s 000s Staff costs 3.1 (693,156) (687,410) Depreciation 4.0 (43,250) (47,241) Other Expenditures 4.0 (442,384) (555,111) (1,178,790) (1,289,762) Income Income from activities ,630 46,495 Other Income ,458 28,714 Transfers from reserves for donated property, plant, equipment & intangibles 5.3 2,725 7,452 82,813 82,661 Net Expenditure (1,095,977) (1,207,101) Revenue Resource Limit (RRL) ,096,041 1,207,175 Surplus/(deficit) against RRL OTHER COMPREHENSIVE EXPENDITURE Restated NOTE 000s 000s Net gain/(loss) on revaluation of Property, Plant and Equipment /10 8,105 1,488 Net gain/(loss) on revaluation of Intangibles / Net gain/(loss) on revaluation of available for sale financial assets 0 0 TOTAL COMPREHENSIVE EXPENDITURE for the year ended 31 March 2011 (1,087,872) (1,205,613) The notes on pages 21 to 66 form part of these accounts. 17

21 STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2011 Restated Restated NOTE 000s 000s 000s 000s 000s 000s Non Current Assets Property, Plant and Equipment 6 980, ,604 1,023,353 Intangible assets 7 2,497 2,283 1,904 Total Non Current Assets 983, ,887 1,025,257 Current Assets Assets classified as held for sale Inventories 11 10,581 10,253 10,168 Trade and other Receivables 12 40,738 54,767 46,690 Other current assets 12 2,951 3,519 4,468 Cash and cash equivalents 13 15,407 13,848 10,822 Total Current Assets 70,342 83,092 72,843 Total Assets 1,053,499 1,018,979 1,098,100 Current Liabilities Trade and other Payables 14 (164,377) (148,716) (155,487) Other Liabilities 14 (575) (1,574) (5,985) Total Current Liabilities (164,952) (150,290) (161,472) Non Current Assets plus/less Net Current Assets / Liabilities 888, , ,628 Non Current liabilities Provisions 16 (50,813) (58,143) (54,895) Other Payables > 1 yr 14 (6,116) (6,691) (4,025) Total Non Current Liabilities (56,929) (64,834) (58,920) ASSETS LESS LIABILITIES 831, , ,708 TAXPAYERS' EQUITY Donated Asset Reserve 31,352 32,458 40,430 Revaluation Reserve 73,419 66,690 58,608 General Reserve 726, , , , , ,708 The notes on pages 21 to 66 form part of these accounts. 18

22 STATEMENT OF CHANGES IN TAXPAYERS' EQUITY FOR THE YEAR ENDED 31 MARCH 2011 NOTE General Revaluation Donation Total Reserve Reserve Reserve Reserve 000s 000s 000s 000s Balance at 31 March ,031 58,608 40, ,069 Change in accounting policy 1.26 (30,361) 0 0 (30,361) Restated balance at 1 April ,670 58,608 40, ,708 Changes in taxpayers equity Donated asset reserve - transfer to net expend for depreciation 0 0 (2,119) (2,119) Donated asset receipts Movement - Other (657) 0 0 (657) Adjustment Non cash charges - auditors remuneration Transfers between reserves 74 (74) 0 0 (Comprehensive expenditure for the year) (1,207,101) 8,156 (6,668) (1,205,613) Grant from DHSSPS 1,133, ,133,376 Balance at 31 March ,707 66,690 32, ,855 Changes in taxpayers equity Donated asset reserve - transfer to net expend for depreciation 0 0 (2,718) (2,718) Donated asset receipts Movement - Other 0 0 (8) (8) Non cash charges - auditors remuneration Transfer of asset ownership (129) 0 0 (129) Transfers between reserves 261 (261) 0 0 (Comprehensive expenditure for the year) (1,095,977) 6,990 1,115 (1,087,872) Grant from DHSSPS 1,117, ,117,900 Balance at 31 March ,847 73,419 31, ,618 19

23 STATEMENT OF CASHFLOWS FOR THE YEAR ENDED 31 MARCH 2011 Cashflows from operating activities Restated NOTE 000s 000s Net expenditure after interest (1,095,977) (1,207,101) Adjustments for non cash costs 57, ,629 (Increase)/decrease in trade & other receivables 14,598 7,949 Less movements in receivables relating to items not passing through the NEA Movements in receivables relating to the sale of property, plant and equipment (Increase)/decrease in inventories (328) (85) Increase/(decrease) in trade payables 14,087 (8,516) Less movements in payables relating to items not passing through the NEA Movements in payables relating to the purchase of property, plant and equipment (7,235) 6,250 Movements in payables relating to PFI and other service concession arrangement contracts (1,574) (1,745) Use of provisions 16 (15,415) (13,737) Net cash outflow from operating activities (1,034,242) (1,070,356) Cashflows from investing activities Purchase of property, plant & equipment 6 (82,876) (59,651) Purchase of intangible assets 7 (829) (867) Proceeds of disposal of property, plant & equipment 32 0 Proceeds on disposal of assets held for resale Net Cash (Outflow) from investing activities (83,673) (59,994) Cash flows from financing activities Grant in aid 1,117,900 1,133,376 Cap element of payments - finance leases and on balance sheet (SoFP) PFI and other service concession arrangements 1,574 0 Net financing 1,119,474 1,133,376 Net increase/(decrease) in cash & cash equivalents in the period 1,559 3,026 Cash & cash equivalents at the beginning of the period 13 13,848 10,822 Cash & cash equivalents at the end of the period 13 15,407 13,848 The notes on pages 21 to 66 form part of these accounts. 20